China’s zero sum game: Economic growth or public health?

Smog is seen over the city against sky during a haze day in Beijing, China, Jan 1, 2017. Pic: Reuters

88

Social Buzz

CHINA’s environmental and pollution problems are back on the agenda, as air pollution levels have rocketed in cities in northern China during the first week of January.

Red alerts have been issued, as smog levels reach unprecedented levels, with Beijing registering nearly 500 on the Air Quality Index (AQI) in recent days: readings above 300 AQI are considered to be seriously damaging to hearts and lungs.

The official recordings from the Chinese government have been a fraction under 500, while the U.S. embassy and other sources claim that AQI’s have gone off the scale over the same period. More than 15 million face masks were sold online during the five-day outbreak of smog, which would account for only 10 percent of the population in the so-called Jing-Jin-Ji industrial belt region.

The smog quickly spread and engulfed two dozen cities across the mainland. A viral video posted on Twitter showed how in just 20 minutes an entire section of Beijing was completely shrouded in a dense, lead-colored fog.

The reason for this season’s record-breaking bout of smog can be attributed to the simple fact that more energy is consumed during winters, as more coal is burned to power industrial and domestic heaters alike. Unfavorable weather systems made a bad problem worse by trapping air over northern cities. The blame has been passed to some degree on car pollution, with car numbers in Beijing being halved.

In fact, China is caught between a rock and a hard place as it attempts to extricate itself from what has all the appearances of a zero sum game: reconciling economic development with its COP21 commitments of reducing CO2 levels.

Case in point: the US$720 billion fiscal stimulus package that was put in place last year to allay market fears that China’s economy was set to crash and burn. The plan concentrated on directing public spending towards 303 big-ticket infrastructure programs, such as railways, highways, airports and urban rail in a bid to create much needed jobs and boost the industrial sector.

And while the plan managed to deliver, with GDP figures picking up steam in the last quarter of 2016, the revived industrial activity sent pollution levels soaring.

A University of California study estimated that air pollution kills 4,000 people every day in China. Not only does air quality affect the long-term health of tens of millions of workers but also has an impact on the water and soil. Top government officials are also worried about the prospect of it resulting in social unrest.

Naturally, the Beijing leadership has talked a tough game in response to the pollution level spike; a new pollution tax is set to come into effect in January 2018 and heavy fines have been handed to those culprits who break the law. Beijing will also create a special police outfit to patrol the streets and fine those breaking environmental rules – such as holding open-air barbecues or burning trash.

Lastly, Beijing’s last coal-fired plant will close this year and reduce overall coal usage by 30 percent. In Hebei province, home to 70 percent of China’s most polluted cities, six steel-making operations that have been ordered to stop sintering in December: Hebei Rongxin Steel, Qianan Zhayi Steel, Tangshan Stainless Steel, Tangshan Xinglong Steel and Tangshan Ganglu Steel. The scale of factory closures shows just how breakneck China’s development has been: highly polluting companies expanding with little to no oversight.

And while these moves might seem to signal a shift China’s regulatory culture, the truth is that the government’s tough talk has been just that – talk. In practice, the enforcement of both pollution standards and government sanctions remains patchy at best. More than 3,700 local officials were kicked out by Beijing for failing to collect fees or to hold industrial companies accountable. In Hebei province alone, 500 environmental officials lost their jobs. As for the six steelmakers ordered to close – they flat out refused to, restarting sintering facilities the moment inspectors left the site.

In a sign of desperation, the Environmental Protection Ministry (MEP) even started a media campaign against the worst offenders, by disseminating strongly worded reprimands to local TV stations and newspapers. Shandong Yuhuang Chemical, Heze Dashu Biological Engineering, and Mancheng Success Paper Industry have been accused of falsifying production data and ignoring government production suspensions. And while the companies temporarily stopped their production, no further sanctions were enacted.

And it’s not just the steel industry that leads the roll-call of shame – Shandong Xinfa Aluminum & Electricity Group, one of the largest aluminium manufacturers on the planet is accused of a litany of environmental crimes, and is emitting particulate matter levels to twice the Chinese legal standard at its smelters in Guangxi and Shandong. Even if the problem is well known by party officials, nothing has been done to crack down on the practice.

The economic penalties currently in place are clearly not deterring the biggest culprits, whose net benefits far outweigh the fines imposed. The new tax is expected to raise somewhere along the lines of US$50 billion in its first year, but there is little sign that it will cut pollution levels and deter the main culprits in the long-term.

The situation remains clear for those who see China’s pollution issue not only to be a national concern but also a global one: the Chinese government must activate criminal prosecutions for the most culpable of repeat offenders if it is serious about cracking down on industrial pollution. Pursuing economic growth at any cost is no longer an option for Beijing.

** This is the personal opinion of the writer and does not reflect the views of Asian Correspondent